The Irish Brokers' Association is advising members to apply to the Central Bank for registration as authorised advisers under the new registration and regulation rules for brokers. Life and general insurance brokers have until June 30th to return detailed registration forms sent out electronically by the Central Bank. The Bank took over regulation of insurance brokers on April 1st.

PIBA, the other association representing brokers, is waiting for full regulation details, including a proposed code of conduct and details of the investor compensation levels that will apply in the different business categories before it advises its members, a spokesman said. The IBA advice to members will necessitate a membership rule change by the association, which will be proposed at its annual general meeting in Kilkenny on May 11th.

To register, insurance brokers must choose between three categories - restricted activity investment product intermediaries (RAIPI), authorised advisers or authorised cash handlers. Brokers registered as RAIPIs can advise on and sell products only of the companies with which they have written agencies. Authorised advisers can advise on all products. Authorised cash handlers, in addition to advising on all products, will be allowed to manage client funds on a discretionary basis.

From the April 1st regulation change, all existing brokers were automatically deemed RAIPIs as long as they supplied the registration details by the end of June.

A broker who wants to be an authorised adviser has to apply specifically for that status. On doing so the broker will be deemed to be one while the Central Bank is assessing the application.

Because of the volume of applications and the need to vet them individually, the Central Bank has up to 12 months from the time an application is made to process it under the legislation. Forms have been sent to some 6,000 brokers.

Brokers opting for authorised adviser status will have a wider brief than RAIPIs, but the requirements for registration are more onerous. In addition to having to submit annual audited accounts to the Central Bank within six months of their financial year end, authorised advisers will have to submit half yearly management accounts, maintain capital of £10,000 (€12,697) and the Central Bank will examine the professional competence at the firm.

In a circular to members seen by The Irish Times, the IBA tells brokers that there are "significant advantages" to authorised adviser status, "not least the title which gives recognition to the provision of `Advice' on a professional basis". It says the RAIPI title focuses on the restriction in status "and it is believed that press coverage will continue to emphasise this and query the independence of RAIPIs". Provision of independent advice is key to the role of insurance brokers, the circular states. "Authorised advisers may give standalone advice, thus significantly increasing the potential to charge fees," it tells members.